Gerdes Psychological Services, Inc., closes its temporary accounts once each year on December 31. The company recently

Question:

Gerdes Psychological Services, Inc., closes its temporary accounts once each year on December 31. The company recently issued the following income statement as part of its annual report.

The firm's statement of retained earnings indicates that a $7,200 cash dividend was declared and paid during the current year.
a. Prepare the necessary closing entries on December 31, current year.
b. If the firm's Retained Earnings account had a $110,400 balance on January 1, current year, at what amount should Retained Earnings be reported in the firm's balance sheet dated December 31, current year?

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...